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GM Bankruptcy; A question
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Topic Started: Jun 1 2009, 10:11 AM (525 Views)
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Mr Gray
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Jun 3 2009, 09:11 AM
Post #31
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Coach
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- boilergrad01
- Jun 3 2009, 09:03 AM
- aaronk2727
- Jun 3 2009, 08:25 AM
2 more points that came back to my attention from listening to commentary last night
1) There are several AMERICAN car companies in existence today who are turning a profit and paying taxes. Has it occured to us that they are essentially being forced to financially support their competition who would love to put them out of business?
2) Has anyone heard a clear answer as to why they are shutting down (GM & Chrysler) so many dealerships as part of their plan? Every dealer and commentator that I have heard to date can't even begin to understand this and how it will even remotely improve the companies.
AaronK, 88% of the dealerships being closed owners contributed to the RNC. I know, I've been trying to find verification of that stat before I post it on here. I have been hearing that those 88% donated EXCLUSIVELY to the GOP.
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 The body knows what fighters don't: how to protect itself. A neck can only twist so far. Twist it just a hair more and the body says, "Hey, I'll take it from here because you obviously don't know what you're doing... Lie down now, rest, and we'll talk about this when you regain your senses." It's called the knockout mechanism.
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yawnzzz
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Jun 3 2009, 12:16 PM
Post #32
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Coach
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- aaronk2727
- Jun 3 2009, 09:11 AM
I know, I've been trying to find verification of that stat before I post it on here. I have been hearing that those 88% donated EXCLUSIVELY to the GOP. I don't know one Democrat that's an owner of a car dealership in my area, so I decided to look to see what I could find for the Democrat/Republican ratio overall and here's what I found what FiveThirtyEight.
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Overall, 88 percent of the contributions from car dealers went to Republican candidates and just 12 percent to Democratic candidates. By comparison, the list of dealers on Doug Ross's list (which I haven't vetted, but I assume is fine) gave 92 percent of their money to Republicans -- not really a significant difference.
There's no conspiracy here, folks -- just some bad math.
It shouldn't be any surprise, by the way, that car dealers tend to vote -- and donate -- Republican. They are usually male, they are usually older (you don't own an auto dealership in your 20s), and they have obvious reasons to be pro-business, pro-tax cut, anti-green energy and anti-labor. Car dealerships need quite a bit of space and will tend to be located in suburban or rural areas. I can't think of too many other occupations that are more natural fits for the Republican Party. Unfortunately, while we are still a nation of drivers, we are not a nation of dealers.
http://www.fivethirtyeight.com/2009/05/news-flash-car-dealers-are-republicans.html
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boilergrad01
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Jun 3 2009, 01:02 PM
Post #33
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Working on the last 5
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538 is a democrat blog. Nate is a smooth motherfucker but he is still a partisian hack. I read 538 alot but that does not mean it is not severly biased. Huffington Post is defending Pres Obama also on this subject what a big surprise
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Nothing beats an Astronaut
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yawnzzz
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Jun 3 2009, 01:16 PM
Post #34
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Coach
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- boilergrad01
- Jun 3 2009, 01:02 PM
538 is a democrat blog. Nate is a smooth motherfucker but he is still a partisian hack. I read 538 alot but that does not mean it is not severly biased. Huffington Post is defending Pres Obama also on this subject what a big surprise
I don't generally read 538, so I didn't know how they lean but it doesn't surprise me since they were quoting the Huffington Post for part of their message. Either way, the side that's claiming somewhere between 78-92% of dealerships affected are GOP donators still need to quantify their data with at least the percentage of dealerships not affected that are GOP donators.
In my town you could say that 100% of dealerships affected were GOP donators ...but then again 100% of dealerships not affected were also GOP donators.
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BoilerUpAT
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Jun 3 2009, 01:38 PM
Post #35
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The Inspector
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- aaronk2727
- Jun 3 2009, 09:11 AM
- BoilerUpAT
- Jun 3 2009, 08:49 AM
Excellent point, Aaron. Why is it that direct competitors to GM and Chrysler (aka, American Subaru, Toyota, Hyundai, Nissan) are not up in arms over this? As large corporations they pay their fair share in taxes every year, which in turn is going to prop up businesses that compete against them.
This is an angle that I have not really thought about much, having been so enraged over the other aspects of the blatant attack on Capitalism with this bailout BS. This issue here is at the core of this whole debate and is really the root of all that is wrong with bailouts.
Do you think the other motor companies have a right to sue the Government over propping up their competitors with their tax dollars?
boiler, you forgot one very important one in that equation....FORD MOTOR COMPANY. I would be enraged if I was Ford, however I think they will keep it quiet to make sure they don't have a foot in their mouth when they ask for money. To answer your question, I personally think they would have a solid complaint if they were to file suit, but we must remember that it is the government who rules on cases like this, so they aren't likely to rule against themselves very often. Yeah, as soon as I typed that I immediately thought of Ford.
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Close by the Wabash, In famed Hoosier land, Stands old Purdue, Serene and Grand, Cherished in Memory, By all her sons and daughters true, Fair Alma Mater, All Hail Purdue
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Mr Gray
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Jun 8 2009, 09:36 AM
Post #36
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Coach
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- brumdog44
- Jun 1 2009, 04:10 PM
- thePhilosopher
- Jun 1 2009, 11:10 AM
Bankruptcy, in this case (Chapter 11), is allowing the gov't to restructure the company as gov't sees fit. Obviously not all Chapter 11 cases involve the gov't in this way: this is a very unique situation. We won't lose our "investment" just because GM declares bankruptcy, but since I and many others believe this will ultimately be unsuccessful, we'll likely sink even more in the company than the $50B we're currently in for.
If GM would have filed Chapter 7, another form of bankruptcy, then they would have been liquidated and their assets would have been sold off in order to pay of their creditors and such. This is what the gov't is trying to avoid, though GM could have declared Chapter 11 on their own and we could have stayed out of it and allowed fresh business people restructure the company. There's a way to get a blue chip company like GM to work on the free market, and gov't intervention is the worst decision for GM considering they didn't have to go into Chapter 7.
I hope this helps. I don't know a whole lot of bankruptcy protection, but I'm sure I will learn a lot more over the next three years in law school.
I do know that a lot of investors because of the bankruptcy that was allowed to take place had to go to the back on the line in getting repaid. The TRF (teacher's retirement fund) had a contract on its investments that stipulated that they would recieve 55 cents on the dollar in the case of bankruptcy. Because the laws were changed midstream on the GM bankruptcy, they were pushed to the back of the line and will recieve 23 cents on the dollar. And before you talk about it just being a teacher's union issue, there were many groups that got held up in the same boat. http://www.cnbc.com/id/31150697/for/cnbc/
Brum, any insight?
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 The body knows what fighters don't: how to protect itself. A neck can only twist so far. Twist it just a hair more and the body says, "Hey, I'll take it from here because you obviously don't know what you're doing... Lie down now, rest, and we'll talk about this when you regain your senses." It's called the knockout mechanism.
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brumdog44
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Jun 8 2009, 03:56 PM
Post #37
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The guy picked last in gym class
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- aaronk2727
- Jun 8 2009, 09:36 AM
- brumdog44
- Jun 1 2009, 04:10 PM
- thePhilosopher
- Jun 1 2009, 11:10 AM
Bankruptcy, in this case (Chapter 11), is allowing the gov't to restructure the company as gov't sees fit. Obviously not all Chapter 11 cases involve the gov't in this way: this is a very unique situation. We won't lose our "investment" just because GM declares bankruptcy, but since I and many others believe this will ultimately be unsuccessful, we'll likely sink even more in the company than the $50B we're currently in for.
If GM would have filed Chapter 7, another form of bankruptcy, then they would have been liquidated and their assets would have been sold off in order to pay of their creditors and such. This is what the gov't is trying to avoid, though GM could have declared Chapter 11 on their own and we could have stayed out of it and allowed fresh business people restructure the company. There's a way to get a blue chip company like GM to work on the free market, and gov't intervention is the worst decision for GM considering they didn't have to go into Chapter 7.
I hope this helps. I don't know a whole lot of bankruptcy protection, but I'm sure I will learn a lot more over the next three years in law school.
I do know that a lot of investors because of the bankruptcy that was allowed to take place had to go to the back on the line in getting repaid. The TRF (teacher's retirement fund) had a contract on its investments that stipulated that they would recieve 55 cents on the dollar in the case of bankruptcy. Because the laws were changed midstream on the GM bankruptcy, they were pushed to the back of the line and will recieve 23 cents on the dollar. And before you talk about it just being a teacher's union issue, there were many groups that got held up in the same boat. http://www.cnbc.com/id/31150697/for/cnbc/Brum, any insight? Ask and ye shall recieve.
http://wjz.com/business/chrysler.fiat.deal.2.1034644.html
The Fiat buyout is more of the BS 'gotta get it done now without any review' crap that led to the bailout previously. Fiat posing saying that 'it has to be done by June 15th.' Screw companies and their arbitrary deadlines. Either the asset is worth purchasing or it isn't.
There are three Indiana funds that are behind forcing the blocking of the deal: the Indiana's Teacher Retirement Fund, the Indiana State Police Pension Fund, and the Major Moves construction fund, which partially funds highway projects around the state of Indiana.
The quotes from the judge that had ruled against the Indiana organizations really piss me off. It doesn't look like he gave a crap about the constitutionality of the government's financing of Chrysler's bankruptcy (and doing so without congressional approval for money coming from the Troubled Asset Relief Program, which appears to be unconstitutional) and his quote of 'do you think you'd be better off waiting for a bid from Studebaker?' is downright insulting. It isn't the job of the court to look out for what is good for a business...it is their job to make sure that the laws of the land are followed.
The point is that there needs to review of the buyout, just like there needed to be much more stringent review of the bailout. Chrysler and Fiat do not get to decide what rules apply to them, especially if it means screwing over those who invested in them.
I have to say I'm been disappointed with the economic decisions that are being made thus far by the current administration.
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IUCOLTFAN
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Jun 8 2009, 04:03 PM
Post #38
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Coach
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- brumdog44
- Jun 8 2009, 03:56 PM
- aaronk2727
- Jun 8 2009, 09:36 AM
- brumdog44
- Jun 1 2009, 04:10 PM
- thePhilosopher
- Jun 1 2009, 11:10 AM
Bankruptcy, in this case (Chapter 11), is allowing the gov't to restructure the company as gov't sees fit. Obviously not all Chapter 11 cases involve the gov't in this way: this is a very unique situation. We won't lose our "investment" just because GM declares bankruptcy, but since I and many others believe this will ultimately be unsuccessful, we'll likely sink even more in the company than the $50B we're currently in for.
If GM would have filed Chapter 7, another form of bankruptcy, then they would have been liquidated and their assets would have been sold off in order to pay of their creditors and such. This is what the gov't is trying to avoid, though GM could have declared Chapter 11 on their own and we could have stayed out of it and allowed fresh business people restructure the company. There's a way to get a blue chip company like GM to work on the free market, and gov't intervention is the worst decision for GM considering they didn't have to go into Chapter 7.
I hope this helps. I don't know a whole lot of bankruptcy protection, but I'm sure I will learn a lot more over the next three years in law school.
I do know that a lot of investors because of the bankruptcy that was allowed to take place had to go to the back on the line in getting repaid. The TRF (teacher's retirement fund) had a contract on its investments that stipulated that they would recieve 55 cents on the dollar in the case of bankruptcy. Because the laws were changed midstream on the GM bankruptcy, they were pushed to the back of the line and will recieve 23 cents on the dollar. And before you talk about it just being a teacher's union issue, there were many groups that got held up in the same boat. http://www.cnbc.com/id/31150697/for/cnbc/Brum, any insight?
Ask and ye shall recieve. http://wjz.com/business/chrysler.fiat.deal.2.1034644.htmlThe Fiat buyout is more of the BS 'gotta get it done now without any review' crap that led to the bailout previously. Fiat posing saying that 'it has to be done by June 15th.' Screw companies and their arbitrary deadlines. Either the asset is worth purchasing or it isn't. There are three Indiana funds that are behind forcing the blocking of the deal: the Indiana's Teacher Retirement Fund, the Indiana State Police Pension Fund, and the Major Moves construction fund, which partially funds highway projects around the state of Indiana. The quotes from the judge that had ruled against the Indiana organizations really piss me off. It doesn't look like he gave a crap about the constitutionality of the government's financing of Chrysler's bankruptcy (and doing so without congressional approval for money coming from the Troubled Asset Relief Program, which appears to be unconstitutional) and his quote of 'do you think you'd be better off waiting for a bid from Studebaker?' is downright insulting. It isn't the job of the court to look out for what is good for a business...it is their job to make sure that the laws of the land are followed. The point is that there needs to review of the buyout, just like there needed to be much more stringent review of the bailout. Chrysler and Fiat do not get to decide what rules apply to them, especially if it means screwing over those who invested in them. I have to say I'm been disappointed with the economic decisions that are being made thus far by the current administration. I give you props for admitting the last line of your statement!
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thePhilosopher
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Jun 8 2009, 08:42 PM
Post #39
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- brumdog44
- Jun 8 2009, 03:56 PM
- aaronk2727
- Jun 8 2009, 09:36 AM
- brumdog44
- Jun 1 2009, 04:10 PM
- thePhilosopher
- Jun 1 2009, 11:10 AM
Bankruptcy, in this case (Chapter 11), is allowing the gov't to restructure the company as gov't sees fit. Obviously not all Chapter 11 cases involve the gov't in this way: this is a very unique situation. We won't lose our "investment" just because GM declares bankruptcy, but since I and many others believe this will ultimately be unsuccessful, we'll likely sink even more in the company than the $50B we're currently in for.
If GM would have filed Chapter 7, another form of bankruptcy, then they would have been liquidated and their assets would have been sold off in order to pay of their creditors and such. This is what the gov't is trying to avoid, though GM could have declared Chapter 11 on their own and we could have stayed out of it and allowed fresh business people restructure the company. There's a way to get a blue chip company like GM to work on the free market, and gov't intervention is the worst decision for GM considering they didn't have to go into Chapter 7.
I hope this helps. I don't know a whole lot of bankruptcy protection, but I'm sure I will learn a lot more over the next three years in law school.
I do know that a lot of investors because of the bankruptcy that was allowed to take place had to go to the back on the line in getting repaid. The TRF (teacher's retirement fund) had a contract on its investments that stipulated that they would recieve 55 cents on the dollar in the case of bankruptcy. Because the laws were changed midstream on the GM bankruptcy, they were pushed to the back of the line and will recieve 23 cents on the dollar. And before you talk about it just being a teacher's union issue, there were many groups that got held up in the same boat. http://www.cnbc.com/id/31150697/for/cnbc/Brum, any insight?
Ask and ye shall recieve. http://wjz.com/business/chrysler.fiat.deal.2.1034644.htmlThe Fiat buyout is more of the BS 'gotta get it done now without any review' crap that led to the bailout previously. Fiat posing saying that 'it has to be done by June 15th.' Screw companies and their arbitrary deadlines. Either the asset is worth purchasing or it isn't. There are three Indiana funds that are behind forcing the blocking of the deal: the Indiana's Teacher Retirement Fund, the Indiana State Police Pension Fund, and the Major Moves construction fund, which partially funds highway projects around the state of Indiana. The quotes from the judge that had ruled against the Indiana organizations really piss me off. It doesn't look like he gave a crap about the constitutionality of the government's financing of Chrysler's bankruptcy (and doing so without congressional approval for money coming from the Troubled Asset Relief Program, which appears to be unconstitutional) and his quote of 'do you think you'd be better off waiting for a bid from Studebaker?' is downright insulting. It isn't the job of the court to look out for what is good for a business...it is their job to make sure that the laws of the land are followed. The point is that there needs to review of the buyout, just like there needed to be much more stringent review of the bailout. Chrysler and Fiat do not get to decide what rules apply to them, especially if it means screwing over those who invested in them. I have to say I'm been disappointed with the economic decisions that are being made thus far by the current administration. Very well said. :cheers:
I'll probably be trying to pick your brain as this case develops. I'm short on time at the moment, but I'll probably start a new discussion on this specifically when I have time. Its very interesting to me, and its cases like this that get me really excited about studying law. If you don't mind me asking, does the current situation with Chrysler effect you personally?
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brumdog44
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Jun 8 2009, 09:00 PM
Post #40
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The guy picked last in gym class
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No, it doesn't affect me personally. I'm still a long way from retirement...we did recieve an e-mail from the ISTA president stating that those on long-term disability would still be getting paid (there were rumors skipped checks). The NEA has partnered with the ISTA to make sure of this.
And as I've said before, while politicians like George Bush (not trying to single him out, just know that he campaigned against the 'evil teacher's unions') rail against unions, there are specific reasons that they exist outside increasing wages. Working conditions, security, and fighting to make sure that promised benefits remain intact are a much more important part of a union. The truth is that there could be much smaller, independent teacher's unions that could make sure that a district kept up with competitive wages...but on the larger scale, we need the state and national organizations to make sure that we aren't getting drilled by legislation from those who have their own personal agendas but no working knowledge of the educational system.
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HoosierLars
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Jun 8 2009, 09:48 PM
Post #41
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3 in a row
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- brumdog44
- Jun 8 2009, 09:00 PM
And as I've said before, while politicians like George Bush (not trying to single him out, just know that he campaigned against the 'evil teacher's unions') rail against unions, there are specific reasons that they exist outside increasing wages. Working conditions, security, and fighting to make sure that promised benefits remain intact are a much more important part of a union. The truth is that there could be much smaller, independent teacher's unions that could make sure that a district kept up with competitive wages...but on the larger scale, we need the state and national organizations to make sure that we aren't getting drilled by legislation from those who have their own personal agendas but no working knowledge of the educational system. Brum, as a Ron Paul supporter, I think you should have more confidence in the market to make sure promised benefits remain intact, and wages remain competitive.
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brumdog44
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Jun 9 2009, 12:04 AM
Post #42
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The guy picked last in gym class
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- HoosierLars
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- brumdog44
- Jun 8 2009, 09:00 PM
And as I've said before, while politicians like George Bush (not trying to single him out, just know that he campaigned against the 'evil teacher's unions') rail against unions, there are specific reasons that they exist outside increasing wages. Working conditions, security, and fighting to make sure that promised benefits remain intact are a much more important part of a union. The truth is that there could be much smaller, independent teacher's unions that could make sure that a district kept up with competitive wages...but on the larger scale, we need the state and national organizations to make sure that we aren't getting drilled by legislation from those who have their own personal agendas but no working knowledge of the educational system.
Brum, as a Ron Paul supporter, I think you should have more confidence in the market to make sure promised benefits remain intact, and wages remain competitive. The benefits would remain largely intact without government intervention.
Under law, the retirement funds were guaranteed 55 cents on the dollar in case of bankruptcy....then Chrysler and the government reached a deal which completely circumvented this and but the pension groups at the back of line, dropping it to around 23 cents on the dollar.
I blame both the shortsighted management of Chrysler and the government for not allowing them to fail. I understand that we would be looking at massive employment from Chrysler's bankruptcy....but in the long run there will be a replacement pop up, one which hopefully will have learned from the mistakes that lead Chrysler to their current position.
The bottom line is that the benefits entered into a situation of known, acceptable risks. What we got was a totally unacceptable risk that was not part of the agreement, thus the lawsuit.
What has been created is an industry/government interdepency that has industry making illogical risks and the government taking taxpayer money and covering up their mistakes. Our industrial sector is incredible short-sighted and our government is allowing it to be that way...I don't have confidence in our market to rebound in it's current state, and Ron Paul would tell you the same thing. Our reality is that we aren't in a Ron Paul market, and unless industry is allowed to fail and the American public can stomach going through times that would get rougher than they even are today, his ideas can't be applied.
We created this beast and we aren't willing to tame it. All we can hope is that we start to train it rather than continue to feed it.
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HoosierLars
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Jun 9 2009, 09:29 AM
Post #43
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3 in a row
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- brumdog44
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Under law, the retirement funds were guaranteed 55 cents on the dollar in case of bankruptcy....then Chrysler and the government reached a deal which completely circumvented this and but the pension groups at the back of line, dropping it to around 23 cents on the dollar.
I blame both the shortsighted management of Chrysler and the government for not allowing them to fail. I understand that we would be looking at massive employment from Chrysler's bankruptcy....but in the long run there will be a replacement pop up, one which hopefully will have learned from the mistakes that lead Chrysler to their current position.
The bottom line is that the benefits entered into a situation of known, acceptable risks. What we got was a totally unacceptable risk that was not part of the agreement, thus the lawsuit.
What has been created is an industry/government interdepency that has industry making illogical risks and the government taking taxpayer money and covering up their mistakes. Our industrial sector is incredible short-sighted and our government is allowing it to be that way...I don't have confidence in our market to rebound in it's current state, and Ron Paul would tell you the same thing. Our reality is that we aren't in a Ron Paul market, and unless industry is allowed to fail and the American public can stomach going through times that would get rougher than they even are today, his ideas can't be applied.
We created this beast and we aren't willing to tame it. All we can hope is that we start to train it rather than continue to feed it. Good post, Brum.
I don't understand how any law can "guarantee" 55 cents in the case of bankruptcy.
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Our reality is that we aren't in a Ron Paul market, and unless industry is allowed to fail and the American public can stomach going through times that would get rougher than they even are today, his ideas can't be applied.
The American public may not have any choice. We've become a society of white color do-nothings that produce little, and live off the backs of second and third world workers. Looking at the bright side, maybe our focus on materialism will be reduced to a reasonable level.
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thePhilosopher
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Jun 9 2009, 09:55 AM
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I disagree with your conclusion, Brum. Whether we can stomach economic downturns or not, we're going to face downturns like this one and much more severe depressions in the future if we don't follow Ron Paul and Austrian economists and change our ways. This involves repealing the Fed, restoring sound money, drastically cutting gov't programs, and reduce the trade deficit by actually producing things. Now, easier said than done, right? But to say that we just don't live in a Ron Paul market misses the point, I think. I think you're correct in your assessment of our current economic reality, but that's the road to ruin! What we want are real economic solutions, and those can best be created by folks like Ron Paul and defenders of a truly free-market. A nominally "free" market won't do anymore, unless we want to be a third world country, which is where we're headed in a half a century (if not sooner!).
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brumdog44
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Jun 9 2009, 06:19 PM
Post #45
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The guy picked last in gym class
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- thePhilosopher
- Jun 9 2009, 09:55 AM
I disagree with your conclusion, Brum. Whether we can stomach economic downturns or not, we're going to face downturns like this one and much more severe depressions in the future if we don't follow Ron Paul and Austrian economists and change our ways. This involves repealing the Fed, restoring sound money, drastically cutting gov't programs, and reduce the trade deficit by actually producing things. Now, easier said than done, right? But to say that we just don't live in a Ron Paul market misses the point, I think. I think you're correct in your assessment of our current economic reality, but that's the road to ruin! What we want are real economic solutions, and those can best be created by folks like Ron Paul and defenders of a truly free-market. A nominally "free" market won't do anymore, unless we want to be a third world country, which is where we're headed in a half a century (if not sooner!). My conclusion isn't on what SHOULD happen, but rather what WILL happen.
Lars -- the 55/23 cent are the numbers based on what the TRF would have recieved under the agreement rather than the amended agreement the government and Chrysler put in place...that is, secured investors would have recieved 55 cents on the dollar in the particular case of Chrysler's bankruptcy rather than 23 cents on the dollar in the case that was negotiated with the government. The numbers are given for this case only.
If the law had been followed, the TRF would have recieved about 55 cents on the dollar rather than about 23 cents, when secured credits were given less priority. There isn't a law that says 'secured investors recieve 55 cents on the dollar;' rather, under the given law and Chrysler's financial situation, that is the approximate amount that the TRF would have recieved.
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